New legislation on tips for staff

The Employment (Allocation of Tips) Act will be coming into force on 1^st October 2024.

Employees can receive tips in different ways, such as directly from customers in cash, as part of their pay pack, or through a separate system for managing and distributing out tips in the workplace.

The government currently has a Code of Best Practice, to ensure that tips are handled ethically. However, the business doesn’t legally have to follow this practice. 

The new Act, however, will bring in the following changes and requirements which businesses must follow:

• Employers must pass on tips in full to workers
• Tips must be distributed in a fair and transparent manner
• Businesses where tips are left often or on a regular basis must have a tipping policy in place
• Tips must be distributed within one month following the month they were given
• Workers are entitled to request a copy of their tipping record to support a claim in an employment tribunal if they believe they have not received the tips they are due
• Employers must maintain a record of how every tip has been dealt with for three years from the date the tip was paid out
• Employers must have regard to the new statutory Code of Practice when allocating tips

The Employment (Allocation of Tips) Act 2023 ensures that all tips are passed on fully to employees and distributed in a fair, ethical way. These changes aim to encourage a more equitable environment for employees and workers alike in industries where they are often the most vulnerable. 

No doubt the public, who rely on the tips reaching the intended worker, will welcome this legislation.